SB317 - Revises provisions relating to industrial insurance. (BDR 53-625)

- 83rd Session (2025) Senate Bill No. 317–Senator Daly CHAPTER.......... AN ACT relating to industrial insurance; revising certain requirements for an insurer or third-party administrator to maintain a physical office in this State; revising the circumstances under which the Administrator of the Division of Industrial Relations of the Department of Business and Industry may conduct certain inspections; revising provisions relating to the administration of certain claims; revising provisions relating to the calculation of certain premium costs; revising provisions relating to certain administrators; revising provisions relating to certain audits; revising provisions relating to certain subsequent injury accounts; authorizing the Administrator to adopt regulations relating to physician assistants; requiring the Administrator to adopt a certain formulary; revising provisions relating to an insurer’s list of certain physicians and chiropractic physicians; establishing and revising various requirements for certain hearings relating to industrial insurance claims; revising provisions governing an injury or disease that is caused by stress; revising provisions governing motions to stay certain decisions and petitions for judicial review; revising requirements for payments for a period of temporary partial disability; revising the circumstances under which the Administrator may impose certain administrative fines; repealing provisions governing certain appeals and certain determinations of a percentage of disability; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law provides for the payment of compensation under industrial insurance if, during the course of employment, an employee is injured or killed by a workplace accident or occupational disease. (Chapters 616A-617 of NRS) Existing law requires an insurer or its third-party administrator to operate or maintain a physical office in this State for certain purposes. (NRS 616B.021, 616B.027, 616B.500) Sections 4.1, 4.15 and 4.45 of this bill authorize a legal representative of the insurer or third-party administrator, as applicable, to operate or maintain such an office. Section 4.1 also requires the Administrator of the Division of Industrial Relations of the Department of Business and Industry to give notice before conducting certain inspections at the physical office of an insurer, third-party administrator or other legal representative. Section 4.15 also: (1) authorizes certain information to be provided as an electronic copy or in an electronic format upon request; and (2) revises certain requirements for availability to communicate with a – 2 – - 83rd Session (2025) claimant or representative of the claimant if a private carrier or third-party administrator operates an office in this State. Existing law authorizes certain persons to administer certain claims from a location in or outside of this State. (NRS 616B.0275) Section 4.17 of this bill additionally authorizes certain self-insured private employers and certain entities associated with the employer to administer certain claims from a location in or outside of this State if the total aggregate number of employees of the employer and associated entities is 30,000 or more. For purposes of calculating the amount of a premium which is due pursuant to the terms of a policy of industrial insurance, existing law provides that the maximum amount paid to any one employee for services provided during the 12- month period during which a policy is effective shall be deemed to be $36,000. (NRS 616B.222) Section 4.2 of this bill eliminates the $36,000 amount for an employer other than the State of Nevada or any agency or political subdivision of the State and instead deems the maximum amount to be a calculation of the maximum average monthly wage using data computed by the Employment Security Division of the Department of Employment, Training and Rehabilitation. Section 4.2 authorizes the State or any agency or political subdivision of the State to elect to be subject to the calculation used by other employers, in accordance with any procedures established by the Administrator for the making of such an election. Existing law requires a third-party administrator for an association of self- insured employers to obtain a certificate as an administrator from the Commissioner of Insurance and to file with the Commissioner a surety bond for the benefit of any person damaged by any fraudulent act or conduct of the administrator. (NRS 616B.503, 683A.08524, 683A.0857) Existing law also requires the third-party administrator to file with the Commissioner an additional surety bond conditioned upon the faithful performance of its duties relative to a particular association of self-insured employers. (NRS 616B.353) Section 4.3 of this bill eliminates the requirement for a third-party administrator to file an additional surety bond relative to its duties to a particular association. Section 4.4 of this bill makes a conforming change to remove the procedure for terminating liability on the bond eliminated by section 4.3. Existing law requires the Commissioner, at least annually, to audit each association of self-insured public or private employers to verify certain information, including the standard industrial classification of each member of the association. (NRS 616B.410) Section 4.37 of this bill instead: (1) requires the Commissioner to require each association, at least annually, to audit the payroll of each member of the association to verify certain information including the classification or classifications, rather than the standard industrial classification, of each member; and (2) authorizes the Commissioner to require the submission of a report summarizing the results of such an audit. Section 4.33 of this bill similarly removes a reference to the standard industrial classification of a member of an association of self-insured public or private employers. Existing law establishes the Subsequent Injury Account for Associations of Self-Insured Public or Private Employers. (NRS 616B.575) Existing law requires money in the Account to be used to provide compensation or reimbursement in situations where an employee who has a preexisting permanent physical impairment incurs a subsequent disability by injury arising out of and in the course of employment which entitles the employee to compensation for the combined disability that is substantially greater than that which would have resulted from the subsequent injury alone. (NRS 616B.563-616B.581) Sections 4.6 and 4.7 of this bill require an employee to have incurred a subsequent disability by injury on or before September 30, 2025, in order for the compensation or reimbursement – 3 – - 83rd Session (2025) provisions to apply, thus prohibiting any claims against the Account because of a subsequent disability by injury which is incurred on or after October 1, 2025. Section 9.3 of this bill authorizes the Administrator to adopt regulations which authorize a treating physician or chiropractic physician, under certain circumstances, to delegate certain routine follow-up care of an injured employee to a physician assistant who is an employee of and under the supervision of the physician or chiropractic physician. Section 9.5 of this bill requires the Administrator to adopt the Official Disability Guidelines (ODG) Drug Formulary published by MCG Health, or its successor, that is required to be used by industrial insurers for any drug which is prescribed and dispensed for outpatient use. Section 9.7 of this bill: (1) prohibits an insurer, with certain exceptions, from providing reimbursement for a drug that is not listed and approved on the formulary, when use of the formulary is required; and (2) authorizes an injured employee to appeal to a hearings officer any determination denying a request for a drug which has been recommended as medically necessary. Section 15.5 of this bill makes a conforming change relating to existing requirements for prescribing generic drugs and determining if the generic drug would not be beneficial to the health of the injured employee. Existing law requires an insurer to keep a list of physicians and chiropractic physicians from which an injured employee may choose to receive treatment from a panel established and maintained by the Administrator. Existing law also sets forth procedures and limitations governing the removal of a physician or chiropractic physician from an insurer’s list. (NRS 616C.087, 616C.090) Section 14 of this bill: (1) prohibits an insurer from removing a physician or chiropractic physician from the insurer’s list except as expressly provided in existing law; (2) requires an insurer, under certain circumstances, to replace any physician or chiropractic physician who is removed from the list within 60 days; (3) authorizes certain audits and revisions of the insurer’s list; and (4) revises certain filing requirements relating to the insurer’s list. Existing law provides that an injury or disease sustained by an employee that is caused by stress is compensable under industrial insurance if it arose out of and in the course of his or her employment. Existing law sets forth the manner by which such an injury must be proven to have arisen out of and in the course of the employment. Under existing law, with certain exceptions, such an injury is deemed to arise out of and in the course of employment only if the employee proves certain elements by clear and convincing medical or psychiatric evidence. (NRS 616C.180) Section 17 of this bill instead requires proof by clear and convincing medical, psychological or psychiatric evidence. Section 17 also requires an insurer to maintain and submit to the Administrator a list of certain providers of mental health care from which an injured employee may choose. Section 20 of this bill requires the Chief of the Hearings Division of the Department of Administration to maintain and make accessible to the public on the Internet website of the Division, a calendar of all matters which are before hearing officers and appeals officers. Sections 23 and 25 of this bill revise provisions governing the circumstances under which: (1) an appeals officer may grant a motion to stay the enforcement of the decision of a hearing officer; and (2) an appeals officer or district court may grant a motion to stay the enforcement of the decision of an appeals officer. Sections 24 and 32 of this bill revise certain procedures for the judicial review of the decision of an appeals officer. If a claim for a period of temporary total disability is allowed, existing law requires an industrial insurer to make the first payment within 14 working days after receipt of the initial certification of disability, and regularly thereafter. (NRS – 4 – - 83rd Session (2025) 616C.475) Section 27 of this bill requires, for a period of temporary partial disability, the first payment or a determination regarding payment to be issued within 14 working days after the insurer receives the claim. Existing law authorizes hearing officers and appeals officers, under certain circumstances, to allow discovery by deposition or interrogatories according to the Nevada Rules of Civil Procedure. (NRS 616D.050, 616D.090) Sections 28 and 29 of this bill prohibit a hearing officer from allowing such discovery, and revise provisions governing the circumstances under which an appeals officer may allow discovery. Section 30 of this bill revises provisions relating to administrative fines which the Administrator may impose for certain violations. Existing law sets forth certain procedures for appealing a final determination concerning accident benefits made by an organization for managed care. (NRS 616C.305) Existing law requires, for a determination of the percentage of disability resulting from occupational disease of the heart or lungs, that the determination be made jointly by the attending physician and examining physician of a claimant, or, under certain circumstances, a designated third physician or panel of physicians. (NRS 617.459) Section 34 of this bill repeals those procedures and requirements, and sections 15, 16, 18, 19, 21-23, 26 and 31 of this bill make conforming changes to remove references to those procedures and requirements from existing law. Existing law requires the Administrator, at least every 5 years, to audit all insurers who provide benefits to injured employees, including associations of self-insured employers. (NRS 616A.270, 616B.003) EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Sections 1-4. (Deleted by amendment.) Sec. 4.1. NRS 616B.021 is hereby amended to read as follows: 616B.021 1. An insurer shall make the files of claims available for inspection and reproduction: (a) At an office operated by the insurer , [or] its third-party administrator or a legal representative of the insurer or third-party administrator located in this State [;] , upon notice from the Administrator not less than 1 business day before the date of the inspection; or (b) By electronic means. 2. The physical records in a file concerning a claim filed in this State may be kept at a location outside this State if all records in the file are made available for inspection and reproduction at an office operated by the insurer , [or] its third-party administrator or a legal representative of the insurer or third-party administrator that is located in this State or by computer in a microphotographic, electronic or other similar format that produces an accurate reproduction of the original. If a claim filed in this State is open, the records in the file must be reproduced and available for inspection – 5 – - 83rd Session (2025) during regular business hours within 24 hours after requested by the employee or the employee’s designated agent, the employer or the employer’s designated agent, or the Administrator or the Administrator’s designated agent. If a claim filed in this State is closed, the records in the file must be reproduced and available for inspection during regular business hours within 14 days after requested by such persons. 3. Upon request, the insurer shall make copies or other reproductions of anything in the file and may charge a reasonable fee for this service. Copies or other reproductions of materials in the file which are requested by the Administrator or the Administrator’s designated agent, or the Nevada Attorney for Injured Workers or [Text truncated for display. Full text available on LegiScan.]